Biodegradable polymers/oligomers based on epsilon-caprolactone (CL) were end-functionalized by a cholesteryl moiety. The functionalized polymers/oligomers, Chol-(CL)n, were synthesized through ring-opening polymerization initiated by cholesterol with a hydroxyl group. The chemical structure of end-functionalized polymers/oligomers was confirmed by FT-IR and 1H-NMR. The molecular weight of the functionalized polymer/oligomer increases with decreasing feed ratio of the initiator cholesterol to the monomer CL. Incorporation of the cholesteryl moiety to the polymer chain results in liquid crystallinity for the resultant oligomers when their molecular chains are not very long. The enzymatic degradation of the functionalized polymers/oligomers was investigated. The microsphere drug-delivery system of a functionalized oligomer was fabricated and its drug release properties were evaluated. The cell-culture experiment indicates the incorporation of cholesteryl moiety to the polymer chain results in improved cell proliferation.